• As a first-time buyer, what is the best way to get started in purchasing for a home?

    The first step in purchasing a home is to figure out how much you can afford. There are several useful and easy calculators on our website to assist you in figuring that out or go to Free Pre-qualification to see if you pre-qualify for a home loan.

    Many borrowers prefer to get pre-approved by a lender, which will guarantee you a maximum purchase price and provide a pre-approval letter. Pre-approved borrowers generally get preferential treatment by selling realtors. Since the seller knows the borrower is pre-approved, that can oftentimes lead to a reduced purchase price.

    To receive your pre-approval letter, go to the Apply Now section of this web page.  Here you will begin an application for your home loan.  The application will ask you several questions about your loan scenario, pull your credit report, review possible loan programs, and provide a pre-approval letter.  It's that easy!

  • Is it necessary to get pre-approved before shopping for a home?

    While not necessary, it is highly recommended that you get pre-approved before making an offer. It can be frustrating for both the buyer and the seller to make an offer on a home, only to find out later you will not qualify for it.  It is very advantageous to know what you can afford before shopping.

    To receive your pre-approval letter, go to the Apply Now section of this web page.  Here you will begin an application for your home loan.  The application will ask you several questions about your loan scenario, pull your credit report, review possible loan programs, and provide a pre-approval letter.  It's that easy!

  • What is the difference between loan pre-qualification and pre-approval?

    A pre-qualification occurs when a prospective buyer discloses, either verbally or by providing documentation of, their income, assets and credit so that a loan agent may determine the loan amount that a buyer could likely qualify for based on standard lending guidelines. A pre-approval involves an underwriter (the lender's risk evaluator) actually reviewing a prospective buyer's loan application with a formal credit determination occurring that is subject to an appraisal, title report and purchase contract, along with whatever supporting documentation the underwriter may request.

  • How much of a down payment should I make?

    There is no easy answer to this question. The higher your down payment, the less interest you will pay over the life of the loan. However, interest on mortgages is tax deductable, and a higher down payment would mean you would be giving up that potential tax savings.

    The answer to this question oftentimes is determined by your current financial situation: e.g. just because you have the funds for a large payment doesn't always mean you should withdraw funds from current investments to make it. The best advice we can give is to consult with a financial advisor or tax consultant, allowing them to review your situation and advise you.

  • Is it possible for relatives to give me a gift for a down payment?

    Certain loan types will allow a gift from a relative for down payment and closing costs. Please consult with your loan officer for more information.

  • What are “points”, and how do I know whether I should pay them?

    Points, also called a "discount point", are a form of pre-paid interest. One point equals one percent of the loan amount. By charging a borrower points, a lender effectively increases the yield on the loan above the amount of the stated interest rate. Borrowers can offer to pay a lender points as a method to reduce the interest rate on the loan, thus obtaining a lower monthly payment in exchange for this up-front payment. For each point purchased, the loan rate is typically reduced by 1/8% (.125%).

    Paying Points represent a calculated gamble on the part of the buyer. There will be a specific point in the timeline of the loan where the money spent to buy down the interest rate will be equal to the money saved by making reduced loan payments resulting from the lower interest rate on the loan.

    Selling the property or refinancing prior to this break-even point will result in a net financial loss for the buyer, while keeping the loan for longer than this break-even point will result in a net financial savings for the buyer. The longer you keep the property financed under the loan with purchased points, the more the money spent on the points will pay off. If the intention is to buy and sell the property or refinance in a rapid fashion, buying points is actually going to end up costing more than just paying the loan at the higher interest rate.

    Points may also be purchased to reduce the monthly payment for the purpose of qualifying for a loan. Loan qualification based on monthly income versus the monthly loan payment can sometimes only be achieved by reducing the monthly payment through the purchasing of points to buy down the interest rate, thereby reducing the monthly loan payment.

    Discount points may be different from origination fee or broker fee. Discount points are always used to buy down the interest rates, while origination fees sometimes are fees the lender charges for the loan or sometimes just another name for buying down the interest rate. Origination fee and discount points are both items listed under lender-charges on the HUD-1 Settlement Statement.

    The difference in savings over the life of the loan can make paying points a benefit to the borrower. If you intend to stay in your home for an extended period of time, it may be worthwhile to pay additional points in order to obtain a lower interest rate. Any significant changes in fees should be re-disclosed in the final good faith estimate (GFE).

    Also directly related to points is the concept of the 'no closing cost loan'. If points are paid to acquire a loan, it is impossible at the same time for a broker bank or lender to make a premium for a higher rate. When premium is earned by making the note rate higher, this premium is sometimes used to pay the closing costs.

  • What is a rate lock?

    A rate lock is a means for the borrower to lock in the lender's current interest rate. Typically, a rate lock will last 15, 30, 40 or 60 days, and during that time the borrower can shop for a new home knowing what they can afford at that interest rate.

  • Can I borrow money for my down payment?

    Typically you cannot borrow money for your down payment or closing costs.  There are some exceptions such as borrowing against your own assets such as a 401K, share loan against a deposit account, etc.  Please consult with your loan officer for more information.

  • What does it mean to “close” a mortgage loan?

    Real property in most jurisdictions is conveyed from the seller to the buyer through a real estate contract. The point in time at which the contract is actually executed and the title to the property is conveyed to the buyer is known as the "closing". During the closing process, you should expect to sit with a Settlement Agency in your area to review and sign the final documents, including the Deed of Trust, which will transfer ownership of the property to you.

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